If you don't follow stocks for a living, you probably don't have the luxury (or connections) to be super-vigilant when it comes to tracking your investments.
See Also: 5 Steps to Start Investing
Still, there are plenty of online resources that can help you stay abreast of news that might affect a company whose shares you own, and allow you to monitor its financial health and evaluate the stock's performance. Remarkably, many of these resources are available at little or no cost.
Consider these five broad areas in which the Web can make you a more informed shareholder.
Step 1: Set Up Your Portfolio
If you haven't already set up a portfolio through an online brokerage account, you can turn to any of several Web sites that offer free trackers you can customize with your list of stock and fund holdings. For example, Kiplinger.com and Yahoo Finance contain basic tools that let you insert the number of shares you bought and at what price. The trackers then use slightly delayed stock quotes to update the value of each holding and your entire portfolio. On both sites, clicking on a stock leads you to a trove of information on the company, including recent news, historical share prices, filings with the Securities and Exchange Commission and, in Yahoo's case, mentions of the stock in blog postings.
For more bells and whistles, download MSN MoneyCentral's Portfolio Manager. Here, you create watch lists and multiple portfolios (you'll have to install a plug-in that runs with Internet Explorer, so it's available only for PCs). View your holdings using an array of measures, including market value, risk or the size of your position. The tracker also performs basic analysis on your investment allocation, performance and potential tax liability.
If you want to be notified when your stock crosses a particular price threshold, MSN and Yahoo will send you an e-mail or text-message alert. Both sites require you to set up an account for this service.
Step 2: Get a Sense of History
In the short term, stocks tend to behave like pinballs, bouncing erratically every time significant—or even not-so-significant—news hits. If you're investing with a long time horizon, you don't need to monitor stock prices daily (although many of us do). "Just realize that any one day won't tell you much," says Craig Hodges, co-manager of the Hodges fund. "But a stock's price action over time is going to tell you the story better than anything out there."
It's worthwhile to study your stock's price movements over different time frames, including bull and bear markets. You should also compare its performance with the overall market, using a benchmark, such as Standard & Poor's 500-stock index, and any other relevant barometers (for example, the Russell 2000 index for shares of small companies). Says Hodges: "Watch where your stock's price moves relative to the benchmark over time. On up days, is your company up more than the market—or vice versa? On down days, is it actually up?"
At Bigcharts.com, run by MarketWatch, you can customize large, easy-to-read charts (a zoom feature ensures that you won't have to squint to find data points). A drop-down menu allows you to compare stocks with indexes or other stocks. You can choose among set time frames or create your own. You can even set up e-mail delivery of charts daily or weekly.
Simplified charts may be found at MSN MoneyCentral, under the "Stocks" tab in the "Investing" section. In addition to viewing your stock's daily closing price over time, you can chart its return in percentage terms and by how much an initial investment would have grown, in dollar amounts, over a given period.